Former Bank CEO, Financier, And Business Owner Indicted For Regulatory And Bank Fraud
NEWARK, N.J. – The former CEO of First State Bank, a financier, and a New Jersey business owner were indicted today by a federal grand jury for their roles in an elaborate scheme to deceive the Federal Deposit Insurance Corporation (FDIC) and to deceive and defraud the now defunct First State Bank (FSB), formerly located in Cranford, New Jersey, U.S. Attorney Craig Carpenito announced.
Joseph Natale, Albert Gasparro, and Gary Ketchum were charged with conspiracy to mislead the FDIC and FSB, misleading those two entities, conspiracy to commit bank fraud and bank fraud in a 13-count indictment. Donna Conroy, a conspirator, pleaded guilty in May 2017 and is awaiting sentencing.
According documents filed in this and other cases and statements made in court:
From September 2009 to September 2010, Natale, Gasparro, Ketchum, Conroy and others created the appearance that $7 million in new capital had been invested into FSB by three bona fide purchasers when, in fact, nominee investors and FSB’s own assets had been misused for that purpose. FSB was defrauded into paying $715,000 in fees for that fabricated capital to Gasparro, who then split that money with Natale. To conceal this misconduct, three fraudulent loans were subsequently obtained from FSB, from which Ketchum wrongfully received an additional $176,000. The defendants then misrepresented the true facts underlying this misconduct to the FDIC and FSB. FSB also previously attempted to obtain funds from the Trouble Asset Relief Program (TARP), but ultimately withdrew the application.
The substantive bank and regulatory fraud charges each carry a maximum potential penalty of 30 years in prison and a maximum fine of $1 million. The charged conspiracy has a five-year statutory maximum term of imprisonment and a maximum fine of $250,000 or twice the loss caused or gain realized from that offense.
U.S. Attorney Carpenito credited Special Agent in Charge Patricia Tarasca, FDIC, Office of Inspector General; special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; and Special Inspector Christy Goldsmith Romero of the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).
The government is represented by Senior Trial Counsel Andrew Leven of the Healthcare & Government Fraud Unit of the U.S. Attorney’s Office, District of New Jersey.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Gasparro: Lawrence Lustberg Esq., Newark
Natale: Michael Critchley Esq., Livingston, New Jersey
Ketchum: Linda Foster, Assistant Federal Public Defender, Newark